(S) AP Macro Test #2
(S) AP Macro Test #2
At a Glance Instructions
Section I of this exam contains 60 multiple-choice questions. Fill in only the circles for
Total Time numbers 1 through 60 on your answer sheet.
1 hour and 10 minutes
Number of Questions Indicate all of your answers to the multiple-choice questions on the answer sheet. No
60 credit will be given for anything written in this exam booklet, but you may use the booklet
Percent of Total Score for notes or scratch work. After you have decided which of the suggested answers is best,
66.67% completely fill in the corresponding circle on the answer sheet. Give only one answer to
Writing Instrument each question. If you change an answer, be sure that the previous mark is erased
Pencil required completely. Here is a sample question and answer.
Electronic Device
None allowed
Use your time effectively, working as quickly as you can without losing accuracy. Do not
spend too much time on any one question. Go on to other questions and come back to
the ones you have not answered if you have time. It is not expected that everyone will
know the answers to all of the multiple-choice questions.
Your total score on the multiple-choice section is based only on the number of questions
answered correctly. Points are not deducted for incorrect answers or unanswered
questions.
The inclusion of source material in this exam is not intended as an
endorsement by the College Board or ETS of the content, ideas, or
values expressed in the material. The material has been selected by
the economics faculty who serve on the AP Macroeconomics
Development Committee. In their judgment, the material printed here
reflects various aspects of the course of study on which this exam is
based and is therefore appropriate to use to measure the skills and
knowledge of this course.
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MACROECONOMICS
Section I
Time —1 hour and 10 minutes
60 Questions
Directions: Each of the questions or incomplete statements below is followed by five suggested answers or
completions. Select the one that is best in each case and then fill in the corresponding circle on the answer sheet.
1. Which of the following typically occurs during an 5. Which of the following will most likely result
expansionary phase of a business cycle? from deflation?
(A) Nominal interest rates decrease. (A) Increased nominal interest rates
(B) Income taxes decrease. (B) Increased business profits
(C) The price level decreases. (C) Increased real value of fixed incomes
(D) Government transfer payments increase. (D) Decreased purchasing power of cash
(E) Employment increases. (E) Decreased real wealth
2. Economic growth refers to an increase in which of 6. Which of the following is a defining characteristic
the following? of a fractional reserve banking system?
(A) Government spending (A) The existence of a central bank with
(B) Consumption spending a monopoly on money creation
(C) Nominal gross domestic product (B) The use of paper money backed by
(D) Potential real gross domestic product a commodity such as gold or silver
(E) Household wealth (C) The fact that banks retain an amount of bank
reserves that is less than the amount of
3. If both the nominal interest rate and the expected customer demand deposits
inflation rate increase, what will happen to the (D) The requirement that banks maintain a certain
real interest rate? percentage of their reserves as a deposit in
an account at the central bank
(A) It will increase because the expected inflation
(E) The regulations that separate investment
rate has increased.
banking from commercial banking
(B) It will increase because the nominal interest
rate has increased.
7. A negative aggregate supply shock will result in
(C) It will increase if the expected inflation
which of the following in the short run?
rate increases by more than the nominal
interest rate. (A) An increase in the price level and a decrease
(D) It will decrease because the nominal interest in the unemployment rate
rate has increased. (B) A decrease in the price level and an increase
(E) It will decrease if the expected inflation in the unemployment rate
rate increases by more than the nominal (C) A decrease in both the price level and real
interest rate. output
(D) An increase in both the price level and real
4. Which of the following statements is true about an output
expansionary fiscal policy? (E) An increase in both the price level and the
unemployment rate
(A) It decreases demand for loanable funds.
(B) It decreases the equilibrium price level.
(C) It decreases the equilibrium real interest rate.
(D) It increases aggregate demand.
(E) It increases the money supply.
23. An increase in the number of which of the 27. Assume that Country X and Country Y are trading
following will lead to an increase in the partners. If the average income in Country X
unemployment rate? increases, which of the following will occur in the
foreign exchange market?
(A) Discouraged workers
(B) Business start-ups (A) The demand for Country X’s currency will
(C) Self-employed persons increase, and Country X’s currency will
(D) Persons working 30 instead of 40 hours appreciate.
per week (B) The demand for Country Y’s currency will
(E) Persons quitting part-time jobs to look increase, and Country X’s currency will
for full-time ones depreciate.
(C) The demand for Country Y’s currency will
24. An economy experiences a sharp increase increase, and Country X’s currency will
in energy prices, and policy makers adopt appreciate.
a stabilization policy to increase aggregate (D) The supply of Country X’s currency will
demand. Compared with the initial short-run decrease, and Country X’s currency will
equilibrium, which of the following will appreciate.
definitely occur? (E) The supply of Country Y’s currency will
increase, and Country Y’s currency will
(A) Lower level of output
depreciate.
(B) Higher level of output
(C) Lower price level
(D) Higher price level
(E) Higher aggregate supply
(A) The money supply will increase and nominal (A) Increase Decrease
interest rates will decrease. (B) Decrease No change
(B) The demand for money will increase and (C) No change Increase
nominal interest rates will decrease. (D) Increase Increase
(C) The demand for money will increase and (E) Decrease Decrease
nominal interest rates will increase.
(D) The demand for money will decrease and 42. Which of the following will most likely contribute
nominal interest rates will decrease. to long-run economic growth?
(E) The opportunity cost of holding money will (A) High levels of household spending
decrease. (B) High levels of government spending
(C) High levels of investment in plant and
equipment
(D) Low levels of immigration to the country
(E) Low levels of foreign investment in the
country
END OF SECTION I
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AP Macroeconomics Exam
®
At a Glance Instructions
The questions for Section II are printed in this orange booklet. You may use the pages in
Total Time this booklet to organize your answers and for scratch work, but you must write your
1 hour answers in the separate Section II: Free Response booklet. No credit will be given for any
Number of Questions work written in this orange booklet.
3
Percent of Total Score The proctor will announce the beginning and end of the reading period. You are advised
33.33% to spend the 10-minute period reading all the questions and planning your answers. You
Writing Instrument may begin writing your responses before the reading period is over.
Pen with black or dark
blue ink Write clearly and legibly. Begin your response to each question at the top of a new page;
Electronic Device completely fill in the circle at the top of each page that corresponds to the question you
None allowed are answering. Cross out any errors you make; crossed-out work will not be scored.
Reading Period Manage your time carefully. You may proceed freely from one question to the next. You
Time
may review your responses if you finish before the end of the exam is announced.
10 minutes. Use this
time to read the
questions and plan your
answers. You may begin
writing your responses
before the reading
period is over.
Writing Period
Time
50 minutes
Question 1
Suggested Time
25 minutes
Percent of Section II Score
50%
Question 2
Suggested Time
12.5 minutes
Percent of Section II Score
25%
Question 3
Suggested Time
12.5 minutes
Percent of Section II Score
25%
MACROECONOMICS
Section II
Total Time—1 hour
Reading Period—10 minutes
Writing Period—50 minutes
Directions: You are advised to spend the first 10 minutes reading all of the questions and planning your
answers. You will then have 50 minutes to answer all three of the following questions. You may begin
writing your responses before the reading period is over. It is suggested that you spend approximately half
your time on the first question and divide the remaining time equally between the next two questions.
Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled
diagram must have all axes and curves clearly labeled and must show directional changes. If the question
prompts you to "Calculate," you must show how you arrived at your final answer. Use a pen with black or
dark blue ink.
THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS.
NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED.
WRITE ALL YOUR RESPONSES ON THE LINED PAGES.
THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS.
NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED.
WRITE ALL YOUR RESPONSES ON THE LINED PAGES.
THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS.
NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED.
WRITE ALL YOUR RESPONSES ON THE LINED PAGES.
THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS.
NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED.
WRITE ALL YOUR RESPONSES ON THE LINED PAGES.
THIS PAGE MAY BE USED FOR TAKING NOTES AND PLANNING YOUR ANSWERS.
NOTES WRITTEN ON THIS PAGE WILL NOT BE SCORED.
WRITE ALL YOUR RESPONSES ON THE LINED PAGES.
END OF EXAM
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